Exhibit 10.3


 


ROCKWOOD HOLDINGS, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Time and Performance Vesting)


 


THIS AGREEMENT (the “Agreement”),
is made, effective as of December 11, 2009 (the “Grant Date”) between Rockwood Holdings, Inc.,
a Delaware corporation (hereinafter called the “Company”), and [NAME],
an employee of the Company or an Affiliate, hereinafter referred to as the “Employee”. For purposes of this Agreement,
capitalized terms not otherwise defined above or below, or in the Plan, shall
have the meanings set forth in Appendix A attached to this Agreement and
incorporated by reference herein.


 


WHEREAS, the Company desires to grant the Employee both time based and
performance based restricted stock unit awards as provided for hereunder (the “Restricted Stock Unit Awards”), ultimately
payable in shares of common stock of the Company, par value $0.01 per share
(the “Common Stock”), pursuant to
the 2009 Stock Incentive Plan for Rockwood Holdings, Inc. and Subsidiaries
(the “Plan”), the terms of which are
hereby incorporated by reference and made a part of this Agreement; and


 


WHEREAS, the committee of the Company’s Board appointed to administer
the Plan (the “Committee”) has determined that it would be to the advantage and
best interest of the Company and its shareholders to grant the shares of Common
Stock provided for herein to the Employee as an incentive for increased efforts
during his term of office with the Company or an Affiliate, and has advised the
Company thereof and instructed the undersigned officers to grant said
Restricted Stock Unit Awards.


 


NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:


 


1.                                       Grant of the Restricted
Stock Units. Subject to the terms and conditions of the Plan
and the additional terms and conditions set forth in this Agreement, the
Company hereby grants to the Employee the opportunity to vest in (i) up to
[insert number of time-based RSUs] RSUs,
which shall vest in accordance with Section 2(a) herein (the “Time-Based RSUs”) and (ii) performance-based
RSUs, which shall vest in accordance with Section 2(b) herein (the “Performance-Based RSUs”) up to [insert 200% of Target Performance-Based RSUs]
Performance-Based RSUs (the “Maximum
Performance-Based RSUs”), of which [insert
target number of Performance-Based RSUs] Performance-Based RSUs
represent your “Target Performance-Based
RSUs.” An “RSU”
represents the right to receive one share of Common Stock, and
Performance-Based RSUs, together with the Time-Based RSUs, the “RSUs”. The RSUs shall vest and become
nonforfeitable in accordance with Section 2 hereof.


 


2.                                       Vesting.


 


(a)                                  Time-Based RSUs.


 


(i)                                     Unless
otherwise provided in this Agreement, so long as the Employee continues to be
employed by the Company or its Subsidiaries, the Employee shall become vested
in a number of Time-Based RSUs equal to [NUMBER]
on December 31, 2012 


 

















 


(the “Vesting Date”).
Unless otherwise provided in Section 2(c) below, promptly on or after
the Vesting Date (but in no event later than 75 days after the end of the
calendar year in which the Vesting Date occurs (i.e., by no later than March 15, 2013)), the Company
shall distribute to the Employee a number of shares of Common Stock equal to
the number of Time-Based RSUs that become vested in accordance with this Section 2(a)(i).


 


(ii)                                  If, prior to
the Vesting Date (and absent the occurrence of any Change of Control), the
Employee’s employment with Company and its Subsidiaries is terminated (x) for
any reason by the Employee (other than due to the Employee’s death, Disability
or Retirement) or (y) by the Company and its Subsidiaries for Cause, then
the Time-Based RSUs shall be forfeited by the Employee without consideration as
of such termination date and this Agreement shall terminate without payment in
respect thereof.


 


(iii)                               If, prior to
the Vesting Date (and absent the occurrence of any Change of Control), the
Employee’s employment with the Company and its Subsidiaries is terminated (x) by
the Company and its Subsidiaries other than for Cause or (y) by the
Employee due to the Employee’s death or Disability, then this Agreement shall
remain outstanding and, on the Vesting Date, the Employee shall be entitled to
receive a distribution of a number of shares of Common Stock equal to the
product of (i) the total number of Time-Based RSUs granted hereunder and (ii) a
fraction, the numerator of which is equal to the number of days between (and
including) the Grant Date and the date such employment so terminates, and the
denominator of which is equal to 1097 (such fraction, the “Proration Factor”). The distribution of
these shares of Common Stock (such shares, the “Prorated Time-Based Shares”) will occur in 2013, as soon as
practicable following January 1, 2013 (but not later than December 31,
2013).


 


(iv)                              If, prior to
the Vesting Date (and absent the occurrence of any Change of Control), the
Employee’s employment with the Company and its Subsidiaries is terminated by
the Employee due to the Employee’s Retirement, then this Agreement shall remain
outstanding and, on the Vesting Date, the Employee shall be entitled to receive
a distribution of a number of shares of Common Stock equal to the total number
of Time-Based RSUs granted hereunder.


 


(b)                                 Performance-Based
RSUs. The vesting of the Performance-Based RSUs shall be subject to the
satisfaction of the conditions set forth in both subsection (i)(A), (B),
(C) or (D), as applicable, and subsection (ii) of this Section 2(b):


 


(i)                                     Service Vesting
Requirement.


 


(A)                              Unless
otherwise provided in this Agreement, so long as the Employee continues to be
employed by the Company or its Subsidiaries through the Vesting Date, the
Employee shall, on the Vesting Date, become vested in a number of
Performance-Based RSUs (not to exceed the number of Maximum Performance Based
RSUs set forth in Section 1 above), determined based on the formulas set
forth in Section 2(b)(ii) below.


 


(B)                                If, prior to
the Vesting Date (and absent the occurrence of any Change of Control), the
Employee’s employment with Company and its Subsidiaries is terminated (x) for
any reason by the Employee (other than due to the Employee’s death, 


 


2

















 


Disability or Retirement) or (y) by the
Company and its Subsidiaries for Cause, then the Performance-Based RSUs shall
be forfeited by the Employee without consideration as of such termination date
and this Agreement shall terminate without payment in respect thereof.


 


(C)                                If, prior to
the Vesting Date (and absent the occurrence of any Change of Control), the
Employee’s employment with the Company and its Subsidiaries is terminated (x) by
the Company and its Subsidiaries other than for Cause or (y) by the
Employee due to the Employee’s death or Disability, then this Agreement shall
remain outstanding and, as of the Vesting Date, the Employee shall become
entitled to receive a distribution of a number of shares of Common Stock equal
to the product of (i) the number of Performance-Based RSUs in which the
Employee would have become vested pursuant to Section 2(b)(ii) below,
if the Employee had remained employed with the Company or a Subsidiary through
the Vesting Date, and (ii) the Proration Factor (such shares, the “Prorated Performance-Based Shares”).


 


(D) (1)              If, during the Performance
Period (and absent the occurrence of any Change of Control), the Employee’s
employment with the Company and its Subsidiaries is terminated by the Employee
due to the Employee’s Retirement, then this Agreement shall remain outstanding
and, as of the Vesting Date, the Employee shall become entitled to receive a
distribution of Prorated Performance-Based Shares (determined based on the
formula set forth in Section 2(b)(i)(C) above).


 


(2)                                  If, after the
completion of the Performance Period, but prior to the Vesting Date (and absent
the occurrence of any Change of Control), the Employee’s employment with the
Company and its Subsidiaries is terminated by the Employee due to the Employee’s
Retirement, then this Agreement shall remain outstanding and, as of the Vesting
Date, the Employee shall become entitled to receive a distribution of a number
of shares of Common Stock equal to the number of Performance-Based RSUs in
which the Employee would have become vested pursuant to Section 2(b)(ii) below,
if the Employee had remained employed with the Company or a Subsidiary through
the Vesting Date.


 


(ii)                                  Performance
Vesting Requirement.


 


(A)                              The
Performance-Based RSUs shall, so long as the Employee remains employed with the
Company or its Subsidiaries through the Vesting Date (or the provisions of Section 2(b)(i)(C) otherwise
apply), vest on the Vesting Date as follows: up to 100% of the Maximum
Performance-Based RSUs awarded hereunder shall become vested if and to the
extent that, during the Performance
Period, (x) the 2010 Actual Adjusted EBITDA, as compared to the
2010 Budgeted Adjusted EBITDA, and (y) the 2010 Actual Adjusted EPS, as
compared to the 2010 Budgeted Adjusted EPS, is achieved, in each case by
certain specified percentages, relative to a targeted 2010 Budgeted Adjusted
EBITDA amount (the “2010 EBITDA Target”)
and a 2010 Budgeted Adjusted EPS amount (the “2010
EPS Target”), respectively, all as set forth on Schedule I attached
hereto and incorporated by reference herein.


 


(B)                                Whether and to
what extent the Performance-Based RSUs have become vested shall be determined
by the Committee at its first meeting after the Financial Statement Approval
Date following the end of the Performance Period (the “Determination 


 


3

















 


Date”), upon the
Committee’s certification of achievement of the applicable performance goals
set forth in Section 2(b)(ii) above.


 


(C)                                Notwithstanding
anything set forth in this Section 2(b) to the contrary, if the Board
does not establish, within the first 120 days of calendar year 2010, any or
either of the 2010 EBITDA Target or the 2010 EPS Target, the Performance-Based
RSUs shall, so long as the Employee remains employed with the Company or its
Subsidiaries through the Vesting Date (or an event described in Section 2(b)(i)(C) occurs),
become 100% vested as to the number of Target Performance-Based RSUs awarded
hereunder, and all other Performance-Based RSUs granted hereunder shall be
forfeited without consideration.


 


(iii)                               Settlement of
Performance-Based RSUs. Promptly after the
Vesting Date (but in no event later than 75 days after the end of the calendar
year in which the Vesting Date occurs (i.e.,
by no later than March 15, 2013)), the Company shall distribute
to the Employee a number of shares of
Common Stock equal to the number of Performance-Based RSUs that become vested
in accordance with Section 2(b) hereof. Any number of
Performance-Based RSUs that do not become vested in accordance with Section 2(b) hereof
(to the extent not already previously forfeited pursuant to Section 2(b)(i)(B) above)
shall, effective as of the Vesting Date, be forfeited by the Employee without
consideration and this Agreement shall terminate without payment in respect
thereof.


 


(c)                                  Effect of
Change of Control. Notwithstanding anything set forth in Section 2(a) or
(b) above, if there occurs a Change of Control, the following rules shall apply with respect
to the RSUs granted hereunder:


 


(i)                                     With respect to
the Time-Based RSUs, if a Change of Control occurs prior to the Vesting Date,
and the Employee is still employed with the Company or its Subsidiaries upon
the occurrence of such Change of Control, all Time-Based RSUs granted hereunder
shall immediately vest and become converted into the right to receive a cash
payment equal to the product of (x) the total number of such Time-Based
RSUs and (y) the price per share paid for one share of Common Stock in the
Change of Control transaction (such price, the “CIC Price”), which cash payment shall be made as soon as
practicable following the Change of Control (but in no event later than 90 days
following such event); and


 


(ii)                                  With respect to
the Performance-Based RSUs, if a Change of Control occurs, and the Employee is
still employed with the Company or its Subsidiaries upon the occurrence of such
Change of Control, if


 


(A)                              such Change of
Control occurs prior to the Determination Date, only the number of Target
Performance-Based RSUs granted hereunder shall immediately vest (and all other
Performance-Based RSUs shall be forfeited by the Employee without
consideration), and shall become converted into the right to receive a cash
payment equal to the product of (x) the total number of such
Performance-Based RSUs and (y) the CIC Price (and all other
Performance-Based RSUs granted hereunder shall be forfeited upon such event), but if


 


(B)                                such Change of
Control occurs after the Determination Date but before the date the
Performance-Based RSUs are settled under Section 2(b)(iii) above, 


 


4

















 


only the number of Performance-Based RSUs
granted hereunder that become vested under Section 2(b)(ii) above
shall become converted into the right to receive a cash payment equal to the
product of (x) the total number of such Performance-Based RSUs and (y) the
CIC Price (and all other Performance-Based RSUs granted hereunder shall be
forfeited upon such event);


 


and in either event
described in clause (A) or (B) above occurs, such cash payment shall
be made as soon as administratively practicable following the Vesting Date (but
in no event later than December 31, 2013);


 


(iii)                               Notwithstanding
Section 2(c)(ii) above, if, following the occurrence of a Change of
Control but prior to the Vesting Date, (A) the Employee’s employment is
terminated by the Company and its Subsidiaries without Cause or by the Employee
for Good Reason, the timing of the payment of the amount otherwise due and
payable under Section 2(c)(ii)(A) or (B), as applicable, shall be
accelerated and shall be paid to the Employee as soon as practicable following
such termination of employment; or (B) the Employee’s employment with the
Company and its Subsidiaries is terminated by the Company and its Subsidiaries
for Cause or by the Employee for any reason (other than due to the Employee’s
death, Disability, Retirement or by the Employee for Good Reason), then the
Performance-Based RSUs and the right to receive any cash as set forth in Section 2(c)(ii)(A) or
(B), as applicable, shall be forfeited by the Employee without consideration
and this Agreement shall terminate without payment in respect thereof; but if


 


(iv)                              the Employee
has ceased to be employed with the Company or its Subsidiaries prior to such
Change of Control under circumstances set forth in Section 2(a)(iii) and
Section 2(b)(i)(C) above, the Employee shall, in lieu of the number
of Prorated Time-Based Shares and Prorated Performance-Based Shares otherwise
distributable pursuant to Section 2(a)(iii) and Section 2(b)(i)(C),
instead be entitled to receive a cash payment, equal to the product of (x) the
total number of such Time-Based Shares and Prorated Performance-Based Shares
and (y) the CIC Price. This cash payment shall be made as soon as
practicable following the Change of Control (but in no event later than 90 days
following such event).


 


3.                                       Dividend
Equivalents. With respect to each cash dividend or distribution
(if any) paid with respect to Common Stock to holders of record on and after
the Grant Date, a number of shares of Common Stock shall be accrued on the
books and records of the Company, in an amount equal to the product of (i) the
amount of such dividend or distribution paid with respect to one share of
Common Stock, multiplied by (ii) the number of vested RSUs (if any) granted
hereunder then held by the Employee. At such time(s) thereafter as the
Employee receives a distribution of shares of Common Stock in respect of his or
her vested RSUs granted hereunder pursuant to the applicable provision of Section 2
above, the Company shall also distribute to the Employee such number of shares
of Common Stock accrued under this Section 3 that relate to the vested
RSUs in respect of which such distribution of shares is otherwise being made.
In the event of any stock dividend, the provisions of Section 8 of the
Plan shall apply to this Restricted Stock Unit Award.


 


4.                                       Limitation on Obligations. The Company’s
obligation with respect to the RSUs granted hereunder is limited solely to the
delivery to the Employee of shares of Common Stock on the date when such shares
are due to be delivered hereunder, and in no way shall the 


 


5

















 


Company become obligated to pay cash in respect of such obligation,
unless as otherwise provided for herein. This Restricted Stock Unit Award shall
not be secured by any specific assets of the Company or any of its
Subsidiaries, nor shall any assets of the Company or any of its subsidiaries be
designated as attributable or allocated to the satisfaction of the Company’s obligations
under this Agreement.


 


5.                                       Rights as a Stockholder. The Employee
shall not have any rights of a common stockholder of the Company unless and
until the Employee becomes entitled to receive the shares of Common Stock
pursuant to Section 2 above. As soon as practicable following the date
that the Employee becomes entitled to receive the shares of Common Stock
pursuant to Section 2, certificates for the Common Stock shall be
delivered to the Employee or to the Employee’s legal guardian or representative.


 


6.                                       Transferability. The RSUs
shall not be subject to alienation, garnishment, execution or levy of any kind,
and any attempt to cause any such awards to be so subjected shall not be
recognized. The shares of Common Stock acquired by the Employee pursuant to Section 2
of this Agreement may not at any time be transferred, sold, assigned, pledged,
hypothecated or otherwise disposed of unless such transfer, sale, assignment,
pledge, hypothecation or other disposition complies with applicable securities
laws.


 


7.                                       Purchaser’s Employment by
the Company. Nothing contained in this Agreement obligates the
Company or any Subsidiary to employ the Employee in any capacity whatsoever or
prohibits or restricts the Company (or any Subsidiary) from terminating the
employment, if any, of the Employee at any time or for any reason whatsoever,
with or without Cause, and the Employee hereby acknowledges and agrees that
neither the Company nor any other Person has made any representations or
promises whatsoever to the Employee concerning the Employee’s employment or
continued employment by the Company or any Affiliate thereof.


 


8.                                       Change in Capitalization. In the event
of any change in the outstanding Common Stock by reason of a stock split,
spin-off, stock dividend, stock combination or reclassification,
recapitalization or merger, change of control, or similar event, the provisions
of Section 8 of the Plan shall govern the treatment of this Restricted
Stock Unit Award.


 


9.                                       Withholding. It shall be a
condition of the obligation of the Company upon delivery of Common Stock to the
Employee pursuant to Section 2 above that the Employee pay to the Company
such amount as may be requested by the Company for the purpose of satisfying
any liability for any federal, state or local income or other taxes required by
law to be withheld with respect to such Common Stock. The Company shall be
authorized to take such action as may be necessary, in the opinion of the
Company’s counsel (including, without limitation, withholding Common Stock otherwise
deliverable to the Employee hereunder and/or withholding amounts from any
compensation or other amount owing from the Company to the Employee), to
satisfy the obligations for payment of the minimum amount of any such taxes. In
addition, if the Company’s accountants determine that there would be no adverse
accounting implications to the Company, the Employee may be permitted to elect
to use Common Stock otherwise deliverable to the Employee hereunder to satisfy
any such obligations, subject to such procedures as the Company’s accountants
may require. The Employee is hereby advised to seek his own tax counsel
regarding the taxation of the grant of RSUs made hereunder.


 


6

















 


10.                                 Securities Laws. Upon the delivery
of any Common Stock to the Employee, the Company may require the Employee to
make or enter into such written representations, warranties and agreements as
the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement. The
delivery of the Common Stock hereunder shall be subject to all applicable laws,
rules and regulations and to such approvals of any governmental agencies
as may be required.


 


11.                                 Section 409A of the
Code. In the event that it is reasonably determined by the Company that,
as a result of the deferred compensation tax rules under Section 409A
of the Code (and any related regulations or other pronouncements thereunder) (“the
Deferred Compensation Tax Rules”),
benefits that the Employee is entitled to under the terms of this Agreement may
not be made at the time contemplated by the terms hereof or thereof, as the
case may be, without causing Employee to be subject to tax under the Deferred
Compensation Tax Rules, the Company shall, in lieu of providing such benefit
when otherwise due under this Agreement, instead provide such benefit on the
first day on which such provision would not result in the Employee incurring
any tax liability under the Deferred Compensation Tax Rules; which day, if the Employee
is a “specified employee” (within the meaning of the Deferred Compensation Tax
Rules), may, in the event the benefit to be provided is due to the Employee’s “separation
from service” (within the meaning of the Deferred Compensation Tax Rules) with
the Company and its Subsidiaries, shall be the first day following the
six-month period beginning on the date of such separation from service.


 


12.                                 Notices. Any notice to
be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the
Employee shall be addressed to him at the address given beneath his signature
hereto. By a notice given pursuant to this Section 12, either party may
hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee’s personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 12. Any notice shall have been deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service


 


13.                                 Governing Law. The laws of
the State of Delaware (or if the Company reincorporates in another state, the
laws of that state) shall govern the interpretation, validity and performance
of the terms of this Agreement regardless of the law that might be applied
under principles of conflicts of laws.


 


14.                                 Restricted Stock Unit Award
Subject to Plan. The Restricted Stock Unit Award shall be subject
to all applicable terms and provisions of the Plan, to the extent applicable to
the Common Stock. In the event of any conflict between this Agreement and the
Plan, the terms of the Plan shall control.


 


15.                                 Signature in Counterparts. This
Agreement may be signed in counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.


 


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[Signatures on
next page.]


 


8

















 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date hereof.


 


	
   

  	
  ROCKWOOD HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME]

  



 


9

















 


Schedule I


 


70% of the Target Performance-Based RSUs (the “EBITDA RSUs”) shall vest subject to the
achievement of the 2010 EBITDA Target, as follows:


 


	
  2010 Actual Adjusted EBITDA Performance as 

  Compared to 2010 Budgeted Adjusted EBITDA 

  (70% of Target Performance-Based Units)

  	
   

  	
  % of
  EBITDA RSUs Vested*

  	
   

  
	
  Less
  than 80%

  	
   

  	
  0%

  	
   

  
	
  80%

  	
   

  	
  25%

  	
   

  
	
  100%

  	
   

  	
  100%

  	
   

  
	
  Greater
  than 120%

  	
   

  	
  200%

  	
   

  



 


30% of the Target Performance-Based RSUs (the “EPS RSUs”) shall vest subject to the
achievement of the 2010 EPS Target, as follows:


 


	
  2010 Actual Adjusted EPS Performance as 

  Compared to 2010 Budgeted Adjusted EPS (30% 

  of Target Performance-Based Units)

  	
   

  	
  % of EPS
  RSUs Vested*

  	
   

  
	
  Less
  than 80%

  	
   

  	
  0%

  	
   

  
	
  80%

  	
   

  	
  25%

  	
   

  
	
  100%

  	
   

  	
  100%

  	
   

  
	
  Greater
  than 120%

  	
   

  	
  200%

  	
   

  



 


With respect to both the EBITDA RSUs and the EPS RSUs, the number of
EBITDA RSUs and EPS RSUs that shall become vested hereunder shall be
interpolated for any achievement of the 2010 EBITDA Target and 2010 EPS Target,
respectively, which falls between the above amounts as applicable.


 


The Company shall communicate to the Employee the 2010 EBITDA Target
and the 2010 EPS Target as soon as administratively practicable following the
date the Board and/or the Committee establishes such targets.


 


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Appendix
A 




Definitions


 


“2010 Actual Adjusted EBITDA” shall mean the Adjusted EBITDA, except
that, for the purposes of this Agreement, any component of EBITDA that is
translated in currencies other than United States dollars shall be converted
into United States dollars using budgeted exchange rates.


 


“2010 Actual Adjusted EPS” shall mean the earnings per share of the
Company, on a fully diluted basis, as reported in the Company’s Form 10-K
filed with the Securities Exchange Commission in respect of the 2010 fiscal
year of the Company, adjusted for non-recurring and unusual items and budgeted
exchange rates for currencies other than the United States dollar to be
converted into the United States dollar.


 


“2010 Budgeted Adjusted EBITDA” shall mean the budgeted Adjusted EBITDA
in respect of the 2010 fiscal year of the Company at budgeted exchange rates,
as determined and approved by the Board and/or the Committee, which is
anticipated to be so determined and approved by no later than April 30,
2010.


 


“2010 Budgeted Adjusted EPS” shall mean the budgeted earnings per share
of the Company, on a fully diluted basis, in respect of the 2010 fiscal year of
the Company, with budgeted exchange rates for currencies other than the United
States dollar to be converted into the United States dollar, as determined and
approved by the Board and/or the Committee, which is anticipated to be so
determined and approved by no later than April 30, 2010.


 


“Adjusted EBITDA” shall mean EBITDA adjusted for all items, as
applicable, set forth in the definition of “Consolidated EBITDA” in the Credit
Agreement dated as of July 30, 2004 among Rockwood Specialties Group, Inc.,
Rockwood Specialties Limited, Rockwood Specialties International, Inc.,
the lenders party thereto, Credit Suisse First Boston, acting through its
Cayman Islands Branch, as administrative agent and collateral agent, and UBS
Securities LLC and Goldman Sachs Credit Partners L.P., as co-syndication agents
thereunder, filed as Exhibit 10.1 to Rockwood Specialties Group, Inc.’s
Report on Form 8-K filed with the Securities and Exchange Commission on August 4,
2004 (“Credit Agreement”) and reported in the Company’s Form 10-K filed
with the Securities Exchange Commission in respect of the 2010 fiscal year of
the Company.


 


“Cause” shall mean (i) the Employee’s willful and continued failure
to perform duties, which are within the control of the Employee and consistent
with such Employee’s title and position, that is not cured within 15 days
following written notice of such failure, (ii) the Employee’s conviction
of or plea of guilty or no contest to a (x) felony or (y) crime
involving moral turpitude, (iii) the Employee’s willful malfeasance or
misconduct which is injurious to the Company or its Subsidiaries, other than in
a manner that is insignificant or inconsequential, (iv) a breach by
Employee of the material terms of any non-compete, non-solicitation or
confidentiality covenants or agreements by which the Employee may be bound,
following notice of such breach (which notice may be oral or written) or (v) any
violation by the Employee of any material written Company policy after written
notice of such breach, if such violation is shown by the Company to be
reasonably expected to result in material injury to the business, reputation or



 


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financial condition of the Company.


 


“Change in Control” shall mean the earliest to occur of the following:


 


(i)                                     any Person
(which term shall mean any individual, corporation, partnership, group,
association or other “person,” as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, other than the
Company or any employee benefit plans sponsored by the Company) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under such Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s outstanding Voting Securities (which
term shall mean securities which under ordinary circumstances are entitled to
vote for the election of directors) other than through the purchase of Voting
Securities directly from the Company through a private placement;


 


(ii)                                  individuals who
constitute the Board on the date hereof (the “Incumbent Board”) cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least
a majority of the directors comprising the Incumbent Board shall from and after
such election be deemed to be a member of the Incumbent Board;


 


(iii)                               a merger or
consolidation involving the Company or its stock or an acquisition by the
Company, directly or indirectly or through one or more subsidiaries, of another
entity or its stock or assets in exchange for the stock of the Company is
consummated, unless, immediately following such transaction, 50.1% or
more of the then outstanding Voting Securities of the surviving or resulting
corporation or entity will be (or is) then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial owners of
the Company’s outstanding Voting Securities immediately prior to such
transaction (treating, for purposes of determining whether the 50.1% continuity
test is met, any ownership of the Voting Securities of the surviving or
resulting corporation or entity that results from a stockholder’s ownership of
the stock of, or other ownership interest in, the corporation or other entity
with which the Company is merged or consolidated as not owned by persons who
were beneficial owners of the Company’s outstanding Voting Securities
immediately prior to the transaction); or


 


(iv)                              all or
substantially all of the assets of the Company are sold or transferred to a
Person as to which (A) the Incumbent Board does not have authority
(whether by law or contract) to directly control the use or further disposition
of such assets and (B) the financial results of the Company and such
Person are not consolidated for financial reporting purposes.


 


Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur unless such transaction or occurrence constitutes a change in
ownership or effective control within the meaning of Section 409A(a)(2)(A)(v) of
the Code.


 


“Disability” shall mean a determination, made at the request of the
Employee or upon the reasonable request of the Company set forth in a notice to
the Employee, by a physician selected by the Company and the Employee, that the
Employee is unable to perform his duties as an employee of the Company or its
subsidiaries and in all reasonable medical likelihood such 


 


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inability will continue for a period in
excess of 180 consecutive days.


 


“Financial Statement Approval Date” shall mean the date on which the
audited financial statements of the Company for the 2010 fiscal year of the
Company have been finally approved by the auditing firm engaged by the Company
to review such statements (which approval shall in no event occur later than March 31,
2011).


 


“Good Reason” shall mean without the Employee’s consent, (i) a
reduction in the Employee’s base salary or annual bonus opportunity (other than
a reduction in base salary that is offset by an increase in bonus opportunity
upon the attainment of reasonable financial targets, which reduction may not
exceed 10% of the Employee’s base salary in any 12 month period), (ii) a
substantial reduction in the Employee’s duties and responsibilities, which
continues beyond 15 days after written notice by the Employee to the Company of
such reduction, (iii) the elimination or reduction of the Employee’s
eligibility to participate in the Company’s benefit programs that is
inconsistent with the eligibility of similarly situated employees of the
Company to participate therein, (iv) a transfer of the Employee’s primary
workplace by more than 35 miles from the current workplace, (v) any
serious chronic mental or physical illness of an immediate family member that
requires the Employee to terminate his or her employment with Company because
of a substantial interference with his or her duties at the Company or (vi) any
failure by the Company to pay when due any payment owed to the Employee within
15 days after the date such payment becomes due.


 


“Performance Period” shall mean fiscal year 2010 of
the Company.


 


“Retirement” shall mean retirement at age 62 or over (or such other age
as may be approved by the Board of Directors) after having been employed by the
Company or a Subsidiary for at least ten years.


 


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